The Federal Reserve continues to create a restrictive macroeconomic environment. While the crypto market has not reached new lows, it has struggled to break from the unfavorable economic woes. Moreover, it appears that the outlook for the crypto market just got a lot grimmer. Raphael Bostic, the president and CEO of the Atlanta Fed, reveals that the fight against inflation is still in its early stages.
Bitcoin prices continue to be in the $19K-$20K range. It is currently trading at $20,214. Ethereum has failed to return to its pre-merge level. It is currently trading at $1366.
Meanwhile, OPEC+ has decided to cut oil production to spike petroleum costs. It can also result in higher inflation.
The Federal Reserve is responsible for controlling abnormal macroeconomic conditions by controlling the money supply. Due to soaring inflation levels, the Fed is restricting the money supply through interest rate hikes and quantitative tightening.
The Fed’s hawkish stance has caused a massive selloff in the crypto market. However, according to Bostic, the Fed is still in the early stages of its fight against inflation. He believes that the Fed needs to increase interest rates by another 150 bps before the end of the year.
The Organization of Petroleum Exporting Countries has also agreed to cut oil exports to cause a price surge. High energy costs can cause soaring inflation levels in the US. President Joe Biden claims that OPEC+ has decided to support Russia’s cause in the war against Ukraine.
Mary Daly, the President, and CEO of the San Francisco Fed also believe that more interest rate hikes are necessary.
The Bank of England pivoted to quantitative easing to stabilize the UK’s economy. The World Bank and the United Nations have warned the central banks about an impending recession.
However, it is unlikely that the Fed will pay attention to the cautionary warnings regarding the recession
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